RFM net profit up 42% to P302M

Food and beverage group RFM Corp. grew its first-semester net profit by 42 percent to P302 million as sales expanded while commodity input prices eased.

In a statement, RFM reported that the bottomline was on the back of a 16-percent year-on-year growth in sales to P5.3 billion. The company said its sales and income growth appeared to be “well on the way to achieving or even exceeding its full-year targets.”

RFM president Jose Concepcion III noted that the company’s income growth was accelerating due to a combination of lower commodity input costs such a milk and sugar as well as increasing sales of higher value products.

“We are likewise benefitting from better economies of scale as we reach the critical mass of sales volume in our key brands Selecta ice cream, in joint venture with Unilever, as well as Fiesta pasta, resulting in higher yields and efficiencies,” he said.

Concepcion added that the bullish economic climate was encouraging consumer confidence and spending and likewise boosting business confidence. “Practically all the company’s brands have been showing growth over last year, led by Selecta ice cream, White King Fiesta pasta, Selecta milk and Sunkist juice,” he said.

Selecta, in particular, benefited from newly launched Magnum ice cream (the Belgian chocolate ice cream on-stick), which the company reported to have “become a craze among the youth market.” With greater supply availability, Selecta has reduced the frequency of out-of-stock experiences since it was launched in March.

With a dominant 71-percent share of the ice cream market, Selecta has continued to grow the ice cream category with “afforable” innovations in its Cornetto and Classic lines.

RFM’s White King Fiesta division, which includes its fast-growing pasta business, expanded its market leadership position to 29 percent from 25 percent last year, according to Concepcion. In key accounts, Fiesta posted an even larger market share of 38 percent.

Other White King products such as all-purpose flour, hot cake and flour mixes have also captured a good slice of the market that prefers easy-to-prepare Filipino native cakes and hot porridge dishes.

“We believe that stronger brand equity and continuous product innovations have influenced the shift in buying pattern and frequency in a number of categories we participate in,” Concepcion said.

Moving forward, Concepcion also disclosed RFM’s intention to accelerate growth organically and through possible acquisitions and strategic partnerships.